Bull s
JK Holdings
Quarterly ReportInternationalOctober,2022
CONTENTS

68No.

P1 JK Holdings overview of 1Q business results
for year ending March 2023

P2 Business Prospect for October ‒ December 2022
P3 Market Outlook of Plywood
JK Holdings declares support for
TCFD Recommendations
P4 Japan Kenzai held an exhibition and sale
Oguronomori Junior High School

JK Holdings overview of 1Q businessresults for year ending March 2023
The supply chain disruptions caused by the constraints
imposed by COVID-19, Russia's invasion of Ukraine, andthe lockdown for maintaining the zero-corona policy inChina have not yet been resolved. In addition, the sharp
drop in housing starts in the U.S. due to higher interest
rates in the country, which led to a sudden increase in thevolume of imported materials from Europe and the U.S. toJapan, lowered material prices on a local currency basis.
However, prices on a yen basis are maintaining a calm
condition due to the yen's isolated depreciation. Meanwhile, in addition to rising prices mainly for energy andfood, mortgage rates including Flat 35, a type of housing
loan, have begun to rise slightly. Accordingly, consumer
demand has been sluggish, and recent housing starts havedeclined year-on-year, causing concerns for the future.
Under these circumstances, our group stimulated its sales
activities in preparation for the Japan Kenzai Fair in AuJXVWZKLFKZDVIRUWKH¿UVWWLPHLQWKUHH\HDUV

Keiichiro Aoki

President
JK Holdings Co.,Ltd.

1HWVDOHVURVH\HDURQ\HDUWRELOOLRQ\HQmuch higher than the strong growth rate in the previousWHUP3UR¿WVPDLQWDLQHGWKHPRPHQWXPRIVLJQL¿FDQW
growth, although the growth rate was less than the previous
WHUPGXHWRKLJKHUSXUFKDVHSULFHV6SHFL¿FDOO\RSHUDWLQJLQFRPHZDVELOOLRQ\HQ XS\HDURQ\HDU RUGLQDU\LQFRPHZDVELOOLRQ\HQ XS DQGQHW
income attributable to shareholders of the parent company$VDUHVXOWRXUFRQVROLGDWHG¿QDQFLDOSHUIRUPDQFHIRUWKH¿UVWTXDUWHURIWKH¿VFDO\HDUHQGLQJ0DUFKZDVDVZDVELOOLRQ\HQ XS DOORIZKLFKVKRZHG
VLJQL¿FDQWLQFUHDVHVLQSUR¿WV

follows.

There are many factors of concern in the housing market,
but our group, as it has always been, will continue to assess
the outlook for change and cope with various issues at handin a timely and appropriate manner. As to our medium andlong term strategy, we raise a long-term vision “Brand-New-.+'´DLPLQJWREHUHERUQDVDPRUHDWWUDFWLYH
FRUSRUDWHJURXSZLWKWKHWDUJHW\HDURI¿VFDOZKLOHPDLQWDLQLQJWKHJURZWKDQGH[SDQVLRQ)RU)<WR)<ZHZLOOGHYHORSVSHFL¿FSURJUDPVDVQHHGHG
under a new medium-term management plan “Further*URZWK´DVWKH¿UVWSKDVHRIWKHYLVLRQDQGWKH¿UVWVWHS
toward further growth.

Bulls International No.68

2Survey
Business Prospect for
October ‒ December 2022
〈Demand Forecast by
Builders and Distributors〉+RXVLQJVWDUWVIRU-DQXDU\WR-XQH
WRWDOHGXQLWV7KH\DUH\HDURQ\HDUEXWFRPSDUHGWR
WKHVDPHSHULRGLQZKLFKKDYH
not returned to the level before theCOVID-19 pandemic. In particular, thenumber of owner-occupied houses thatVWDUWHGLQ-XQHZDVDWRIWKH
same month last year, showing theseventh consecutive month of year-onyear decline. The total starts of owner-occupied houses from January
WKURXJK-XQHZHUHXQLWVWKH
lowest ever since 1965, when comparable records are available. The environment is very severe especially for1001.5-20-30

-34.5

-50

-46.0

-40-60-70-9.0 -10.0-21.1-15.0-40.6

In the sales forecasts bymajor manufacturers,
the number of negative
views increased in the$ERXWWZRWKLUGVRURIWKH
respondents expect to exceed theprevious year's level in sales for theApril-September period. A series ofprice hikes and price revisions has been
implemented for a variety of products,
which is presumed to have helped boost
sales.
In addition, while purchase prices are
ULVLQJRQO\RIWKHUHVSRQGHQWVKDYHGLI¿FXOWLHVLQSDVVLQJRQKLJKHU
costs to customers, which results in a
deterioration of their earnings due totheir selling prices being lower thantheir purchase prices. The remaining
approximately two-thirds have successfully coped with the price increases forvarious items.

-65.4-80 Oct-Dec.

Apr-Jun.
2021

2020

Oct-Dec.
2021

Apr-Jun.
2022

The forecast survey for October – December, 2022 is based on the totaled data
gathered from 3,000 client companies in Japan through the internet, which
took place from late-July to mid-August, 2022.

Oct-Dec.
2022

Point0=business result in April-June,1992

Dealing Volume of Lumber

Demand Forecast by Distributors
1065-1.30-2055-15.6 -19.1-26.2-30

50-43.1-40-38.0-50

45-48.5-60

40-66.7-80 Oct-Dec.
2020

Laminated lumber
Solid lumber
Precut lumber
LVL

60-13.0-10-70〈Various Topics〉〈Sales Forecast〈by Leading〈Manufacturers〉

Demand Forecast by Builders-10

WKUHHVHFWRUVRWKHUWKDQKRXVLQJHTXLSment. The lifting of the overseas lockdown is expected to restore production
capacity and to improve supply shortDJHRIKRXVLQJHTXLSPHQW2QWKHRWKHU
hand, the situation for plywood, which
GHFUHDVHGVLJQL¿FDQWO\KDVFKDQJHG
The sales forecast showed a drop ofZKLFKGHWHULRUDWHGIURPLQ
the survey before last (for April to June owner-occupied houses.
Under the circumstances, we conducteda survey about business demand prosSHFWVIRU2FWREHUWR'HFHPEHU
Usually fall demand can be expected,
but small builders (contractors andRWKHUEXLOGLQJFRPSDQLHV DQGGLVWULEXtors continuously predicted a negativeindex compared to the previous survey
IRUWKHSUHYLRXVTXDUWHUVKRZLQJDIXUWKHUGHFOLQHIRUWKUHHTXDUWHUVLQDrow.
By area, a majority of the respondents
in the Hokuriku and Chugoku regions
SUHGLFWHGD³GHFUHDVH´LQGHPDQG
whereas the number of those who
IRUHFDVWD³GHFUHDVH´JUHZFRPSDUHGWR
last year in the Hokkaido and Shikokuregions. Demand in the housing sector
has been steady even with the pandemic, but we will keep a close eye on how
the trend will be as consumer spending
recovers and prices soar.

Apr-Jun.
2021

Oct-Dec.
2021

Apr-Jun.
2022

35 Oct-Dec.

Oct-Dec.
2022

2020

Apr-Jun.
2021

Oct-Dec.
2021

Apr-Jun.
2022

Oct-Dec.
2022

Point100=all responses expect increase

Point0=business result in April-June,1992

Sales Forecast by Major Supplying Manufacturers（Oct-Dec. 2022）
increase

Plywood（12 ﬁrms）
Wooden Building Materials（10 ﬁrms）
Ceramic/Heat Insulation（15 ﬁrms）
Housing Equipment（9 ﬁrms）
averageover15％

14 〜 10％

below10％

0.0

8.3

8.3

0.0

4.8

0.0

level-oﬀ

decrease
below10％10 〜 14％

over15％

25.1

33.3

25.0

0.0

23.8

42.8

23.8

4.8

0.0

0.0

11.5

42.4

42.3

3.8

0.0

4.5

0.0

22.7

63.8

4.5

0.0

4.5

1.1

3.3

16.6

43.5

26.0

8.4

1.1

Bulls International No.68

Trend
Market Outlookof Plywood〈Trend of Japanese Plywood〉
Japan’s production of softwood plyZRRGLQ-XO\ZDVFXELF
PHWHUV \HDURQ\HDU DQG
VKLSPHQWRIWKHLWHPZDVFXELF
PHWHUV  ,QYHQWRULHVZHUH
FXELFPHWHUV  Since the delayed delivery of contracted products started, the market situationof domestic softwood plywood is stableparticularly in the general distribution
route. As a production line trouble in amajor manufacturer of long-length
products did not have a strong impact
on the market, buyers were able tohandle the situation by using substituteproducts. Since July, Inventories ofdomestic manufacturers are increasingslightly, but not to the point of excess,and we estimate that it is still within therange of no problem.

〈Trend of Imported Plywood〉-DSDQ¶VLPSRUWRISO\ZRRGLQ-XO\ZDVFXELFPHWHUV \HDURQ\HDU ZKLFKLQFUHDVHGE\IURPFXELFPHWHUVLQWKH
previous month. Looking into the result
E\WKHFRXQWU\RIRULJLQFXELF
PHWHUV  FDPHIURP0DOD\VLDFXELFPHWHUV  FDPH
from Indonesia, and 61,194 cubic
PHWHUV  FDPHIURP&KLQD
Cumulative port arrival has kept goingstrong from January to July with\HDURQ\HDU,QWHUPVRILWHPV

Wholesalersʼ Prices of Plywood in Tokyo

yen/sheet

4,500
4,000
3,500
Structural Use 12mm JAS F4☆
Concrete Form 12mm JAS
Softwood Plywood for Structural Use 12mm JAS F4☆
Softwood Plywood for Structural Use Neda-non 24mmwith tongue JAS F4☆

3,000

Recent prices of the item are levelingoff. There is a sense of peaking out,
however, some makers mention that, tomaintain prices, they are planning tobalance the supply and demand byproduction control in the future. In anycase, the price of domestic logs as thematerial of this product is falling. Thesituation will become delicate soon.

ODUJHTXDQWLW\RI,QGRQHVLDQRUGLQDU\plywood arrived. This item isslow-moving, and it is one of thefactors that cause the warehouse to be
fully stocked. Overall shipments weresluggish, and the market is buying for
LPPHGLDWHUHTXLUHPHQWV$VLQYHQWRULHV
of port warehouses at each region have
sharply increased, it has become normal for some storerooms to rejectaccepting containers. Ship demurrage isalso normalized. This situation is
expected to continue until port arrivals
drastically decrease or shipments pickup.

2,500
2,000
1,500
1,000

Oct.
Nov. Dec.
Jan.
Feb.
Mar.
Apr.
May
Jun.
Jul.
Aug.
Sep.
2021 2021 2021 2022 2022 2022 2022 2022 2022 2022 2022 2022

Topics 1

JK Holdings declares support for TCFD Recommendations
JK Holdings Co., Ltd. declared its
support for the Recommendations ofthe Task Force on Climate-related)LQDQFLDO'LVFORVXUHV 7&)' LQ-XQH
The Group's main business areas arethe manufacture and sales of plywood,processing and sales of lumber, andwholesale of building materials andKRXVLQJHTXLSPHQW0DQ\RIWKHSURGucts we handle originate from theutilization of forest resources in Japanand overseas. Therefore, we recognize
the importance of preserving the global
environment in order to build a stable
VXSSO\FKDLQKDYLQJLGHQWL¿HGFOLPDWH
change as one of the key issues.

We will accurately assess the impact ofclimate change on our business throughour efforts on the key issues to reinforce our disclosure based on the TCFD
Recommendations.

3

4Bulls International No.68

Japan Kenzai held an exhibition and sale

Topics 2Opening ceremony

Japan Kenzai Co., Ltd. held a trade
H[KLELWLRQ³-DSDQ.HQ]DL)DLU´DW
7RN\R%LJVLJKWRQDQGRI$XJXVW,WZDVWKH¿UVWIDFHWRIDFHH[KLELtion in three years. Due to the impactsof COVID-19, the number of visitors
WRWDOHGSHRSOHRURIWKH
planned number of visitors, but theVDOHVUHDFKHGELOOLRQ\HQRU
RIWKHSODQQHGDPRXQW8QGHUWKHWKHPHRI³5RDGWR
&RQQHFWLQJQRZDQGWRWKH)XWXUH´
there were many exhibits that publicize

SDGs introduction corner, set in the center of the venue

the efforts to achieve the SDGs. Topics
that stood out at the seminars held at
the fair site include decarbonization,
HQHUJ\HI¿FLHQF\DQGUHQHZDEOHHQHUJ\DQG'; 'LJLWDO7UDQVIRUPDWLRQ Japan Kenzai Co., Ltd. were able toprovide visitors with an opportunity torecognize the environment surroundingthe housing industry and to touch theODWHVWHTXLSPHQWExhibition of Japan Kenzai’s private brand Bulls, mainly
Wooden materials displayed in the image of a forest foundation building materials

Oguronomori Junior High SchoolTopics 3

Hall made of domestic Larch LVL, domestic Cypress Classroom built with domestic Cedar LVL, domestic
lumber, and domestic Cypress CLTLarch LVL, and domestic Cypress CLT

Oguronomori Junior High School

The school building of Nagareyama Municipal³2JXURQRPRUL-XQLRU+LJK6FKRRO´LQ&KLED3UHIHFWXUHKDYLQJWKUHHÀRRUVDERYHJURXQGLVRQHRIWKH
largest wooden school buildings (partially reinforced
FRQFUHWHDQGVWHHOIUDPHV LQ-DSDQ7RWDOÀRRUDUHDLVVTXDUHPHWHUVZRRGHQSDUWRIZKLFKLVVTXDUHPHWHUV
Among our group companies, Japan Kenzai Co., Ltd.,KEY TEC Co., Ltd., TIMBERAM Co., Ltd. andBUTSURIN CO., LTD. engaged in the construction ofthis property. Japan Kenzai was involved in the structural woodwork and part of the building woodwork insuccession after having completed “Oguronomori(OHPHQWDU\6FKRRO´LQWKHSUHYLRXV\HDU.(<7(&manufactured and processed LVL, TIMBERAM didLarch laminated lumber, and BUTSURIN procured
the materials for lumber.
In this case, as many as seven kinds of wood structure
construction methods are used for one group of buildings. As the materials for wooden
structural framework, various wooden
structural materials including sawnwood, laminated lumber, LVL, CLT,and structural plywood were used. In
DGGLWLRQVWULFWTXDOLW\FRQWUROZDVUHTXLUHGLQHYHU\WKLQJIURPWKHDFFXUDcy of manufacturing and processing ofmaterials to overall construction work.
This architecture was completed obtainLQJWKHFRRSHUDWLRQRIYDULRXV¿HOGVbeyond the boundaries of internal
departments in our company.

Staircase built with domestic
Cypress CLT

Wood Land Tower 1-7-22 Shinkiba Koto-ku,Tokyo 136-8405 Japan
Phone +81-3-5534-3800 Fax +81-3-5534-3835
URL https://www.jkhd.co.jp
C 2022JK Holdings Publication Copyright○